All Forum Posts by: Joseph High

@Jermaine Chad Ingram

It seems like you've been running numbers on a lot of deals to understand the range in that area. 

What attributes are consistent for those cap rates? Have you been able to narrow down your criteria for what you're looking for? 

@Jermaine Chad Ingram

I wrote that without seeing the updates and after I saw them, I was in the middle of editing my original post when you responded just now. Sorry for the confusion!

If you put down around 55%, the property would break even. You are correct that if you did an all cash purchase, you would have about $137 in cash flow.

We operate in the Nashville market and our minimum cash-on-cash return is 6%. 

A good resource to utilize is Roofstock. You can see what the returns are on similar properties and neighborhoods. They don't have listings in every market, but it's at least a helpful tool. 

What are the cap rates for other properties in this town?  

@Jermaine Chad Ingram

I agree with @Aaron K. on about this - run away from this deal!

From the expenses side, your insurance is killing you. Additionally, the home is older so more likely than not you will spend more on repairs. 

Also, the amount of cash needed for this deal is crazy considering your returns. You have to put down over 50% for the property to break even. That's 30k for an investment that won't cash flow!

Keep looking and evaluating, looking forward to seeing the next deal you run by!

@Jermaine Chad Ingram

What is your strategy for this property? Did you purchase the property in April for 20k, or are you just now looking at purchasing the property? 

@Jeremy Goodman

Not surprised if this has already been mentioned, but What Every Real Estate Investor Needs to Know about Cash Flow is a great book to read as well. It also provides you with a lot of really helpful spreadsheet templates for when you're ready to start evaluating deals. 

@Robert Collins

First, the biggest pro is that you're able to start building wealth now. A dollar today is worth more than a dollar tomorrow. Second, you can also invest in bigger deals than if you were just investing by yourself. For instance, you could partner up to purchase a 10-unit multi-family complex instead of buying 2 SFH properties by yourself. Third, you can access the network/expertise of a more experienced investor.

One con is that you limit your returns. By bringing another person into the deal, you decrease how much cash you will receive. Additionally, your goals/perspective might differ than another person. You might disagree on what repairs are needed, the degree of risk you are willing to take, or what to do when problems happen with the property. 

@Jeremy Goodman

Welcome to the community! Glad to have you on board.

This is a great place to learn, bounce ideas off of everyone that is on here, and move closer to making your goals happen. 

Have you been reading just the BiggerPockets blog posts or any other real estate books? 

@Account Closed They're going to be 200k and up. But I had thought of structuring my terms in a similar manner: 

Between $0-$10k down

At a 200k purchase price, do a 5% yield: $1000 a month with no interest

5 year balloon 

@Account Closed I'm looking at doing an owner financed deal and I'm curious to know how you presented the terms to the agent. Were they glad to sell the property, or did you have to restructure the terms of the deal several times before they were willing to go for it? 

@Andrew Atakpo

Congrats on getting ready to take the leap into real estate investing!

In addition to thinking what your goals are for this investment, another thing to consider is your own time and quality of life. If you go the house hacking route, you will have to give up time (and maybe adding another stress factor) dealing with tenants, corresponding with vendors, etc. Your time is not free, even if you're not paying another person to provide you with a service. What is your time worth? 

Are willing to take that on for the purpose of building wealth? Or do you want to be more hands off and have someone else do that for you in another state?